Estimation of housing needs amid population growth and change

Abstract

This article proposes a theoretical framework and more accurate methods for projecting the household growth component of estimates of housing needs. These estimates combine empirical evidence with normative assumptions about the quantity of housing expected with population growth. Recent California experience illustrates the theoretical and practical issues involved. Alternative empirical methods are used to model changes in per capita household formation and homeownership rates over time.

The results show great instability between 1960 and 2000 in the linkage between population and housing needs, casting doubt on which linkage to use for future projections. Past changes in housing growth are attributed to changing population composition and occupancy patterns for subgroups. Estimates based on a cohort method are lower than those using constant rates of housing consumption and conform much more closely to recent experience, but it may not be desirable to lock in the deficiencies of the past when projecting needs.     

Private market provision of low‐income housing: Historical perspective and future prospects

Abstract

The unaided private market provision of new low‐income housing is substantially a fantasy. There is little on the horizon to alter this situation in the next decade. The income/cost gap is so substantial as to overcome the decline in household formation and positive changes in job patterns that have been advanced as bridge mechanisms.

To set the debate in context, an overview of the demographic and economic future of the United States is provided and mainstream forecasts of economic and demographic trends affecting housing supply and demand are reviewed. Particular attention is given to demographic maturation and shrinkage, household diversification and segmentation, and income and poverty dynamics.     

Comment on Victoria Basolo and Mai Thi Nguyen's “Does mobility matter? The neighborhood conditions of housing voucher holders by race and ethnicity”

Abstract

Creating the opportunity for minorities to move away from poor, racially concentrated neighborhoods to better ones is an important goal of the Housing Choice Voucher Program. However, mobility is not its only—or even its primary—objective. Rather, it aims to reduce severe rent burdens for very low income families and individuals.

Basolo and Nguyen imply that the voucher program by itself can overcome entrenched patterns of racial discrimination. This is unrealistic, even when families receive search assistance. Instead, the test is whether a minority family with a voucher is more likely to live in a low‐poverty, low‐minority neighborhood than the same family without a voucher. The program passes that test. However, Basolo and Nguyen's analysis points to the need for more research on voucher use in localities like Santa Ana where overcrowded housing is an issue, in neighborhoods with a mixed minority population, and in specific metropolitan areas.     

Racial/ethnic differences in housing outcomes for first‐time,low‐income home buyers: Findings from a National homeownership education program

Abstract

Federal housing policies aimed at making homeownership more accessible through education and affordable lending have been successful in raising the homeownership rate among minorities. By marketing homeownership to underserved populations and helping them overcome financial and informational obstacles, such programs might be expected to promote equality in housing outcomes, including housing quality, neighborhood composition, and neighborhood conditions, for minority homeowners.

This article examines the experience of participants in a national home‐ownership education program. While the transition to homeownership has been associated with modest progress, it does not overcome persistent disparities in housing quality. Homeownership appears to lead to poorer neighborhood conditions for all lower‐income buyers—not just minorities—and may be exacerbating social and spatial isolation rather than helping to overcome it. Differences in neighborhood outcomes, however, may be due to locational preference rather than discrimination in housing and mortgage markets.     

Understanding the neighborhood: From residents’ perceptions and needs to action

Abstract

Motivated by a renewed interest in homeownership, the U.S. Department of Housing and Urban Development developed techniques to study patterns of ownership. A baseline model is used to forecast homeownership in 2000 and then extended to illustrate how policy initiatives designed to overcome race‐and income‐based barriers to ownership could affect the national homeownership rate and the rates of ownership by specific subgroups. Another technique uses American Housing Survey data to estimate how these initiatives could affect household location and the choice of housing type.

This article clearly demonstrates that even limited success in reducing race‐and income‐based disparities will result in a significant increase in the national homeownership rate and dramatic increases for subgroups, such as minorities, young households, and low‐income households, that have low rates of homeownership. Thus, these techniques affirm the importance of focusing on access and affordability.     

Demographic dynamism and metropolitan change: Comparing Los Angeles,New York,Chicago, and Washington,DC

Abstract

The fluid dimensions of demographic status—age, career progression over time, geographic redistribution, and growing duration of residence—have not been sufficiently recognized in urban theory and policy. Demographic dynamism deserves special attention because it is through the presumed consequences for people that we judge the desirability of economic, political, and physical changes in a city. To explore the magnitude and significance of these issues, population dynamics and associated poverty and homeownership trends in four major metropolitan regions are compared.

Los Angeles may be changing more rapidly, but its dynamics only accentuate trends under way elsewhere. Rising proportions of the population that are neither in the white “majority” nor black “minority,” the low proportion of longtime residents, and the new challenge of immigration call into question fundamental assumptions about links between people and urban policy. The meaning of both poverty trends and homeownership attainments must be reassessed.     

Changing occupant characteristics in rural public housing in the Great Plains: 1977 to 1996

Abstract

Housing quality and affordability are growing concerns in rural areas, particularly in regions affected by economic restructuring and population decline. This article uses data from the U.S. Department of Housing and Urban Development to assess changes in the characteristics of nonmetropolitan public housing residents in the Great Plains between 1977 and 1996.

Results indicate that public housing occupants were younger and more racially diverse in 1996 than in 1977. Also, a larger proportion received welfare benefits in addition to housing supplements. (In 1977, few households received both types of assistance.) Regression models reveal a significant positive relationship between changes in county population, unemployment rates, and economic designation and minority representation in public housing. Implications include the need for flexible measures that meet the changing needs of subsidized households. The characteristics of these households in the Great Plains region indicate the need for both region‐specific and coordinated housing and welfare policies.     

Comment on Jack Goodman's “houses,apartments, and the incidence of property taxes”

Abstract

Goodman finds from his analysis of the 2001 Residential Finance Survey that multifamily housing bears a higher effective property tax rate (EPTR) than single‐family owner‐occupied housing and argues that much of the differential is associated with the lower average property value of apartments. We offer comments on how this important research can be enhanced and analyze the EPTR by using a different database, the Public Use Microdata Sample (PUMS) of the decennial census.

Like Goodman, we find from the PUMS that the EPTR of multifamily housing is high relative to that of single‐family detached housing and that lower‐value multifamily housing has a higher EPTR relative to that of higher‐value multifamily units. We offer preliminary findings from the PUMS on the implications of the EPTR for development patterns (it may discourage smart growth), equity (the poor and minorities bear a higher tax burden), and housing (high EPTRs challenge affordability).     

Causes of the growth of homelessness during the 1980s

Abstract

This article presents an analysis of the factors that predicted 1989 homelessness rates in large U.S. cities. Data were collected to describe homelessness rates in the 182 cities with populations over 100,000. In addition, variables were assembled to represent many factors that have been hypothesized to cause homelessness, including each city's housing and income conditions, household resources, employment conditions, employment structure, available public benefits, and cost of living. The researcher used regression analysis to assess the impact of each hypothesized causal factor on between‐city differences in 1989 homelessness rates for the 147 primary cities in the data set (excluding suburbs) and for subgroup breakouts based on level of manufacturing employment and population growth from 1980 to 1986. The article ends with a discussion of policy implications of the patterns discovered.     

Child characteristics and successful use of housing vouchers: Estimates from the moving to opportunity demonstration

Abstract

Voucher‐based programs have become the most common form of housing assistance for low‐income families in the United States, yet only a slim majority of households that are offered vouchers actually move with them. This article uses data from 2,938 households in the Moving to Opportunity demonstration program to examine whether child characteristics influence the probability that a household will successfully use a housing voucher to lease‐up.

Our results suggest that while many child characteristics have little bearing on the use of housing vouchers, child health, behavioral, and educational problems, particularly the presence of multiple problems in a household, do have an influence. Households with two or more child problems are 7 percentage points less likely to move than those who have none of these problems or only one. Results suggest that such families may need additional support to benefit from housing vouchers or alternative types of affordable housing units.     

Social rehousing policy in britain: Needs,rights, and choices

Abstract

When selecting among competing applicants for rehousing in social rented property, the perceived wisdom in Britain since the 1940s has been to award priority to households in the greatest housing need. “Need” is often defined in highly complex ways. However, a shift has occurred in local authority and housing association rehousing policies away from allocations made solely on the basis of need. This shift comes in response to the changing context in which social rented housing has operated in the past 15 years and to perceived weaknesses in needs‐based systems. Present policies are designed to address wider objectives, including developing stable communities and minimizing housing management problems.

This article examines these policy changes and the extent to which local housing allocations are used to address not only individual household needs, but also the concerns of local communities and wider housing management issues.     

Interpreting the dynamics of public housing: Cultural and rational choice explanations

Abstract

This article uses culture of poverty and rational choice theories of poverty to explain how quickly nonelderly household heads leave public housing. Data from the Panel Study of Income Dynamics serve as the basis for the analysis.

Although a significant proportion of all household heads have public housing spells lasting five or more years, the majority have spells lasting less than five years. The availability of other housing options has a strong impact on how quickly individuals move out of public housing. Family structure and human capital play a more modest role. To the extent that one's childhood experiences affect the likelihood of exiting public housing, they appear to do so mostly through their effect on the acquisition of human capital. Finally, the evidence presented is inconsistent with the notion that public housing is a trap from which it is more difficult to escape the longer one lives in it.     

Economic shifts and the changing homeownership trajectory

Abstract

From 1980 to 1988, homeownership rates declined substantially for the first time in the postwar era. They stabilized and began to creep upward during the 1988–94 period. After presenting a long‐term perspective, this article describes and examines two of the underlying forces of this upswing—demographic aging and improved levels of affordability—as well as the impact of immigration and minority lags. Fundamental economic factors are then surveyed: national and regional housing price shifts, housing production cycles, measures of housing affordability, and employment. Several key economic parameters of the post‐recession housing market are presented as a guide to the short‐term future.

Post‐1988 homeownership rates initially rose because of an aging demography. But gradually, the new affordability became part of the dynamic. The new affordability was driven by the decade‐long slowdown and weakening of housing prices, lower post‐recession interest rates, and accelerated job creation following the period of “jobless” economic growth.     

Reinventing the central city as a place to live and work

Abstract

Public policies for urban development have traditionally emphasized investment in physical infrastructure, the development of large‐scale commercial facilities, the construction of new housing, and the renewal of existing neighborhoods. Most efforts to revitalize central cities by building new facilities for visitors have focused on suburban commuters and tourists. At the same time, many housing initiatives in central cities have concentrated on low‐income communities because outlying suburban areas have attracted traditional middle‐income households.

This article argues that emerging demographic and cultural trends—combined with changes in the structure of business organizations and technological advances—provide new opportunities for cities to retain and attract middle‐class households. Using gay and lesbian populations as an example, it focuses on the role that nontraditional households can play in urban redevelopment. In light of the rise of nontraditional households and the growth of self‐employment and small businesses, cities should adopt policies that make them attractive places in which to live and work.     

Central‐city and suburban migration patterns: Is a turnaround on the horizon?

Abstract

The huge population losses that characterized many older, larger U.S. cities during the 1960s and 1970s slowed and in some cases ceased during the 1980s and early 1990s. Periodic media reports of neighborhood turnarounds, commercial revitalization, and improvements in housing and the quality of life in selected inner‐city subareas have been taken as signs that central cities are retaining middle‐class residents and even attracting some back from the suburbs.

Analysis of metropolitan household migration patterns based on the U.S. Census Bureau's 1980 and 1990 Public Use Microdata Samples and more recent Current Population Surveys shows that the dominant trend in residential movement among most population subgroups is still toward the suburbs. While not discounting reports of central‐city neighborhood turnarounds and selective demographic revitalization, our findings imply that those improvements are limited and that a widespread back‐to‐the‐city movement is not likely in the foreseeable future.     

Challenges confronting nonprofit housing organizations’ self‐sufficiency programs

Abstract

In recent years, interest has grown at the federal level in strategies to combine subsidized housing with programs promoting household self‐sufficiency. This article explores how nonprofit housing organizations conceptualize their self‐sufficiency programs for their residents. A broad definition of self‐sufficiency is presented—one that is not exclusively focused on the individual and, instead, also includes program strategies that are focused on changing the context in which individuals live and work.

The paper then analyzes the relationship between the self‐sufficiency strategies being implemented in the nonprofit housing world and how these organizations will be affected by welfare reform, the shrinking and restructuring of federally subsidized housing, the emergence of block grant job training and workforce development programs, and the general devolution of government programs into ever more fungible pots at state and local levels. These transformations in the domestic policy agenda will present challenges to nonprofit housing organizations and to the goal of promoting self‐sufficiency.     

Do impact fees raise the price of existing housing?

Abstract

This article uses 1991–2000 data on single‐family housing sales from King County, WA, to provide new evidence relating to the effects of impact fees on housing prices. The hedonic regression method is used to examine the effects of these fees on existing housing as well as their differential effects on price as determined by housing quality.

Impact fees raise existing home prices by about 83 percent of the amount of the fee. The increase is 103 percent for high‐quality homes and is not statistically significant for low‐quality homes. The owners of high‐quality homes realize capital gains from impact fees. However, such fees do not raise the price of low‐quality homes. To the extent that low‐quality housing is more likely to be owned by low‐ and moderate‐income households, which are often composed of racial and ethnic minorities, this finding has significant policy implications for the supporters of impact fees.     

Comment on Langley C. Keyes et al.’s “Networks and nonprofits: Opportunities and challenges in an era of federal devolution”

Abstract

Housing markets are determined by a complex interplay of consumers and suppliers. The Keyes et al. article discusses the changing landscape for nonprofit housing providers and what recent developments in federal housing assistance policy will mean to them. But this perspective is too narrow to predict the effects of changes in federal housing policy because all housing providers are somewhat interrelated. All housing providers need to be considered, and using the terms “for‐profit” and “nonprofit” to distinguish between the two types of providers is unfortunate and misleading.

For‐profits and nonprofits are fundamentally different: They place a different emphasis on community, and nonprofits can often deliver subsidies that for‐profits cannot. In addition, the strengths and the skills needed to produce housing under somewhat different objectives have led to some specialization. Ultimately, however, determining the optimal provider or mix of providers is best left to local and state governments as federal housing assistance devolves.     

Homeownership affordability series Clashing demographics: Homeownership and affordability dilemmas

Abstract

This paper examines the competing effects of the major demographic factors affecting homeownership affordability in the 1990s. It briefly views the transition in housing eras and then examines long‐term demographic fundamentals, which represent parameters that can be anticipated with reasonable certainty and that define the broad boundaries of future housing demand. The first section, on household segmentation‐diversification, focuses on changes in household configurations and future living‐arrangement choices. Income variations by age and household configuration are evaluated next, after which homeownership variations by age and household configuration are reviewed. Both the uncertainty of future household segmentation and clashing demographic variations in income levels and home‐ownership rates define future housing market complexity and uncertainty.

Following that is a summary of the key demographic parameters and dilemmas emanating from the preceding analyses. A final section then explores the net effect of these factors on various housing market segments for the balance of the decade.